One out of five Americans find Internet 'essential'

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If you live in the U.S. and have been surfing for a substantial time, you may fall into the ranks of one out of five Americans who feel that the Internet is the "most essential" medium to their lives, according to a new study by the Arbitron Inc. and Edison Media Research research and analysis groups.

According to the study, dubbed "Internet 9: The Media and Entertainment World of Online Consumers," Americans chose the Internet and TV (34 percent and 35 percent, respectively) as the most "cool and exciting" medium. About half (46 percent) of 12-to-34 year-olds chose the Internet, with 29 percent choosing TV as the "most essential" medium to their lives.

And if you've listened to streaming media online in the past week, chances are that you've bought more than one and a half times the number of compact discs in the past year than the average American, the study says. This conflicts with the generally held perception that hardcore computer users buy fewer CDs because they download songs from the Internet.

What's more, people who stream media online go to movie theaters considerably more often (3.19 times) than the typical consumer (1.85 times) in the past three months.

"While some in the entertainment industry have viewed streaming as a threat, the study shows that it really represents a tremendous opportunity," said Bill Rose, vice president and general manager, Arbitron Webcast Services, Arbitron Inc. "Marketing music on streaming media channels provides access to a lucrative group of record buyers that could be an important key to revenue growth for record labels. Similarly, movie studios have the opportunity to reach frequent movie-goers by promoting their new films via webcasting."

The Arbitron-Edison study also confirms that broadband connections continue to grow despite the slowing economy. Residential broadband adoption has doubled in the last 18 months, increasing from 13 percent of those with at-home Internet access in January 2001 to 28 percent in July 2002. And this growth trend appears to be far from over. According to the study, one out of five of those with dial-up home Internet access intend to convert to broadband in the coming year.

The study shows that record numbers of Americans continue to consume Internet audio and video. As of July 2002, an estimated 83 million Americans have now experienced Internet audio or video, the report notes. The number of people who have listened to audio or watched video online in the past month grew slightly from the prior year -- from 37 million in July 2001 to 38 million in July 2002.

On a related note, people surveyed for the study are very concerned about recent industry turmoil. Half are aware of the digital rights controversies that have caused several Webcasters to cease streaming. Two-thirds indicate that they are upset about not being able to listen to canceled Internet audio Webcasts and a similar number support action by Congress to help Internet audio webcasters afford to continue streaming, the report says.

In fact, people displayed more interest than ever before in paying for online content. In July 2002, nearly a quarter (22 percent) of Internet audio customers (an estimated 16 million Americans) indicated that they would be willing to pay a small fee to listen to the online audio channel they currently listen to the most. In comparison, only 14 percent were interested in paying a fee in January 2002.

The study says that access to the Internet has leveled off at approximately 70 percent of all Americans. But though Internet adoption is slowing, the average daily time spent online continues to steadily increase, approaching one hour per day. In July, Americans reported spending an average of 58 minutes online per day, up from 41 minutes in July 2001, the report says.